The Basics Of How To Start An Importation Business In Nigeria

Importation Business In Nigeria

In this article, we will be unveiling the answers to the many major questions many ask about the importation business in Nigeria.

People have been exposed to the idea of bringing in goods from overseas into Nigeria because it’s a passive source of income which has made many people rich.

Meanwhile, different kinds of goods can be imported into Nigeria. Goods like wears, jewelries, shoes, bags, furniture, phones and phone accessories, cars, electronics, and even building materials and many more.

These goods can be imported into Nigeria from other different countries, but the most popular and easy countries that support direct importation into Nigeria are China, Dubai, Turkey, UK, Germany, USA, and other countries in Africa.

The real deal is to buy for a small price and then resell at your desired price here in Nigeria. Therefore, as long as you can pick your product, get the right supplier, and get a legit and valid shipping agency to ship your goods, you are good to go. But the most important thing is to gain the trust of people to become your customer and make you their supplier here in Nigeria.

Nonetheless, many businessmen and businesswomen are skeptical of the business because they are concerned about whether the importation business is profitable or not.

What Are The Things To Consider Before Starting An Importation Business In Nigeria?

The following are the things you must consider before starting an import business in Nigeria:

1. Knowing the market of the product you want to import. And also assessing how the product is being demanded.
2. Inquire about the suppliers of such products. This involved considering the country that best fit in to supply the product.
3. Identifying the requirements needed to start an import business. Perhaps, this includes both the licenses needed, documents, and taxes.
4. Coming up with a good marketing strategy.

What Are The Types Of Importation Business In Nigeria?

There are two major types of importation business in Nigeria which are:

1. The Mini Importation Business: Mini importation business also known as “small-scale importation” or “online importation” involves the buying of goods/products just like the normal importation business. But everything is done online.

In mini importation, you only need your smartphone/computer, a valid address, a valid email, and a steady internet connection to get started. In a nutshell, it doesn’t always involve licenses or customs procedures.

2. Large Scale Importation: This is the main type of importation business that involves importing goods into a country from another country (exporter). This type of importation requires legal procedures and fulfilling them is a must to operate fully and legally.

What Are The Most Imported Products In Nigeria?

According to Nigeria’s trade report, the most imported products/goods in Nigeria are:

1. Electrical/Electronics equipment
2. Pharmaceutical products
3. Organic chemicals
4. Bales of clothes
5. Iron and steel
6. Plastics
7. Mineral fuels
8. Milling product
9. Medical Apparatus
10. Wheat, etc.

What Are The Most Profitable Items To Import From China To Nigeria?

China is the father of many products. And these are the most profitable items to import from China to Nigeria: Bags, shoes, phone accessories, tailoring materials, children’s toys, kitchenwares, makeup tools, electronics, etc.

What Are The Cheap Things To Buy From Dubai And Sell In Nigeria?

The cheap things you can buy from Dubai and sell in Nigeria are laptops, notebooks, children’s toys, fans, men’s shirts, washing machines, wristwatches, jewelry, voile lace, antiques, etc.

Meanwhile, targeting Dubai as the source of your goods can be relatively simple as far as you are prepared to fulfill the requirements. First, you start by identifying the products you want to import from Dubai to Nigeria. After that, you get your import-export license which is very important to avoid some legal problems.

The next thing to do is to negotiate with the suppliers and also navigate with a logistics/shipping company that can deliver to Nigeria. Or rather still travel to Dubai and follow the due process.

How Profitable Is Importation Business In Nigeria?

Starting an importation business is one of the most rightful decisions you can take. This is because the demand for imported products has no limit.

Yes, Nigerians feels excited when they hear that the products they are buying are imported from abroad. For this reason, the import business is very profitable.

What Are The Challenges Of Importation Business In Nigeria?

Import business cannot be entirely accurate. The process of importation business comes with its challenges. However, the challenges you may face when importing goods in Nigeria are:

1. Delay in customs goods clearance
2. Lack of information about the current market trends
3. High cost of importing goods due to transportation costs, high rate of the dollar, and other clearance
4. Poor systemization of import planning
5. Lack of import management experience
6. High cost of goods
7. Strong local and international competition
8. Fluctuating cost of goods after you must have imported the goods.
9. Inability to import to potential clients’ standards.

What Are The Import Procedures In Nigeria?

Before you become an importer, there are procedures involved. The following procedures must be fulfilled if you want to start importing goods to Nigeria:

1. Your company must be registered and have a certificate of registration/incorporation.

2. Your company must be registered with the Federal Inland Revenue Service (FIRS) with up-to-date proof of tax payment which a Tax Identification Number (TIN Number) will be made available with a valid email attached to it.

3. You have to choose a bank of your choice to act as the ADB (Authorised Dealer Bank). It is your chosen bank that will then process the Form M/Pre-Arrival Assessment Report (PAAR) as well as mediate among you (as the importer), the Nigerian Customs Service (NCS), and other necessary bodies.

When the above procedures are fulfilled, then you are now ready to start importing. Meanwhile, the below steps must be taken:

1. You get your Regulatory Certificate, which involves the Product Certificate (PC). That is for items that are already regulated.

2. You activate your Products Certificate (PC) on the online single window.

3. Also, you open a Form M on the Nigerian Trade Platform and attach the required documents and submit them to the Authorised Dealer Bank (ADB).

4. The ADB has to review/validate Form M, which they will now send to the Nigeria Customs Service (NCS).

5. The NCS has the right to accept or reject the Form M depending on the information provided.

6. When the NCS accepts the Form M, you then forward a copy of the Form M to your supplier who will in turn contact Cotecna, the international accreditation firm with the Form M, the bill of lading/airway bill, the final invoice and the packing list, for the issuance of the SONCAP certificate.

7. You then activate the SONCAP Certificate and apply for Pre-Arrival Assessment Report (PAAR) Issuance on the Nigerian Single Window For Trade.

8. Once the PAAR is issued, you now commerce with the clearance of your goods.

9. You submit your import manifest to Customs/NPA/Terminal operator. Furthermore, you pay shipping charges, and NPA charges and issue a bill of lading.

10. This is the final stage of the import procedures and it involves Terminal weighing/handling, loading of cargo, delivering of goods, etc.

However, ensure that all the documents submitted are genuine, it will aid in smooth approval and operation.

What Are The Documents Required For Importation In Nigeria?

There are numerous documents needed for importation which are:

1. Insurance certificate
2. Performa invoice
3. Regulatory Permits/Certificate like SONCAP, NAFDAC, etc
4. Bill of lading
5. Airway bill
6. Form M
7. Certificate of Business Registration
8. Product Certificate (PC)
9. Pre-Arrival Assessment Report (PAAR)
10. Packing List
11. Certificate Of Origin
12. Single Goods Declaration (SGD), etc.

All these documents are needed for the smooth running of your importation business. And without them, the import procedures won’t be complete.

How Much Does It Cost To Start An Importation Business In Nigeria?

Some factors like shipping route, destination, feet of container, and most especially the type of goods you want to import play a role in determining the cost of starting an import business.

For example, a 40ft container of clothes from the USA to Nigeria ranges from ₦35 million to ₦50 million on average which clearing may or may not be involved. So if you’re planning on starting an import business you should have a budget of ₦50 million naira, unless you will partner with a trusted person (importer) and start which will make it lesser in capital.

How Can I Start Importing To Nigeria?

Before you can start importing to Nigeria, the first thing to do is to register your company. Unless you want to partner with an importer which you will use his or her company on an agreement for importation business.

Secondly, your company must be registered with the Federal Inland Revenue Services (FIRS), and it must fulfill all the legal requirements and permits like SONCAP, import permit, PAAR, and products certificate.

You will need to choose the type of goods you want to import and carry out a feasibility study to understand their demands, import requirements, and the categories they fall under. This will help you find out the agency and regulatory bodies to work with.

Most importantly, when starting an importation business you will need to select a bank that will act as the Authorised Dealer Bank (ADB). Your chosen bank will serve as an intermediary between you (as the importer), the Nigeria Customs Service (NCS), and other necessary bodies. They will as well process your Form M/PAAR (Pre-Arrival Assessment Report).

Furthermore, you have to activate the PC (Product Certificate) and SONCAP online using your Tax Identification Number (TIN) and email you used in registering with the Federal Inland Revenue Services (FIRS). However, you can achieve this by applying for PAAR issuance on the Nigerian Single-Window for Trade.

Once your Pre Arrival Assessment Report is approved, you now commence with the clearance of your goals.

Finally, you submit your import manifest to customs. And this final stage comes with the payment of shipping, clearing, and delivering of goods.

In layman’s understanding, to start an importation business you have to do the following:

1. Ensure your company is registered
2. Choose the type of goods you want to import and make sure you meet up with the legal and import requirements by providing all the necessary documents
3. Obtain import license
4. Meet with the supplier of the goods and make arrangements
5. Provide all the necessary licenses and documents required for custom clearance
6. Finally, after taking the above steps, the import process should begin without any obstruction. And don’t forget that the Product Certificate (PC) and SONCAP Certificates are very important in importation. And without them, you won’t be able to ship goods to Nigeria.

Conclusion

With the above steps, you are good to start an importation business. Meanwhile, it is advisable to carry out an offline investigation by inquiring from other importers to get more ideas on how it is being done.

Ambassador Victor Chidera
Ambassador Victor ChideraAmbassador Victor Chidera is a business consultant, writer and a blogger. He provides lots of professional and expert advice to small businesses, entrepreneurs and organizations. He has many years of experience in business, teaching field, and research work. And his aim is to provide business articles that matters to you both nationally and internationally.
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